Analysis of Ternary Batteries in Small Motive Power Market

SHANGHAI, Sep 5 (SMM) - New energy sector is now one of the most popular sectors in China, and lithium-ion battery has attracted much attention with its excellent application in energy storage and power vehicles. In addition, it is also widely used in 3C digital products, electric tools, and the small motive power for electric bicycles. On August 16, Tianli Lithium Energy, which targets the small motive power market, officially announced its listing on ChiNext. The company is so far one of the few listed ternary material manufacturers whose main business concentrates on the small motive power batteries.

Other well-known domestic lithium battery manufacturers for small motive power include Phylion Battery, Tianneng Co., Ltd., Changhong New Energy, HighStar, Hengdian Group Dmegc Magnetics, Sungrow, Great Energy, etc.

As disclosed in the prospectus of Tianli Lithium Energy, there are basically three kinds of batteries for electric bicycle. The first kind is ternary materials blended with LMO as adopted by Phylion Battery, the second is NMC battery, and the third is LFP battery. Each of them has a unique advantage.

Generally speaking, LMO prices are low, the energy density of ternary materials is high, and LFP has better cycle performance. Therefore, LFP enjoys the most favour in the sharing vehicle market which emphasised on recycling, while NMC battery has more advantages in electric bicycle market for high-end civilian use. In particular, 5-series NMC cathode materials are mostly used for its better performance in terms of safety and cost.

According to SMM survey, the production process of NMC cathode materials is similar in different enterprises, but the overall performance requirements of ternary materials used in small motive power are lower than those in motive power. In addition, different from the motive power sector, there is a large number of power battery cell manufacturers for small motive power used in electric bicycle. Meanwhile, the technology routes varied in different enterprises because there is not a common standard for lithium-ion batteries. Moreover, the manufacturing of small motive power batteries entails less amount of raw materials, so the wire cutting frequency of small motive power material manufacturers is slightly higher than that of motive power material manufacturers. In terms of trading mode, pricing of most power battery is highly linked to the prices of raw materials, while ternary precursor and ternary cathode material plants mainly gain profits from processing fees. On the one hand, the cost of small motive power battery is sensitive to raw material prices, and on the other hand, the demand for consumer electronic products and small motive power batteries is particularly weak this year. Therefore, most small motive power material manufacturers quoted based on the auction prices with reference to raw material prices.

It is expected that the overall demand for small motive power will increase in the future as the travelling demand of consumers elevates, and the demand for ternary materials will also rise accordingly.